Question

Which of the following is likely to lead to an increase in the GDP of a​ country? A. An increase in the interest rates in the country B. An increase in the physical capital stock of the country C. An increase in the tax rates in the country D. An increase in the unemployment rate in the country

Answer 1

B. An increase in the physical capital stock of the country

Step-by-step explanation:

Gross domestic product is the sum of all final goods and services produced in an economy within a given period which is usually a year.

GDP calculated using the expenditure approach = Consumption spending + Investment spending + Government Spending + Net Export

If physical capital stock is increasing, it means investment spending is increasing and gdp would rise.

Increase in tax rate reduces disposable income which leads to a fall in consumption and gdp.

An increase in interest rate leads to a fall in investment and gdp.

If unemployment is high, gdp would be low.

I hope my answer helps you